ESPN FM?

[badjef]

This is major, but it says more about the future of Emmis, than it does about spoken word migration.

98.7 - Kiss, good-bye.

Jeff in Sa-ra-so-ta!

 

[jvn]

If you read this article someone posted on the NJ Board Emmis is in Debt and this deal will help them out to some extent. Here's the Complete deal as far as money in concerned between Emmis, Espn (Disney), The soon to be new owners of WBLS, and an Insurance Company.

http://www.thedeal.com/content/tmt/emmis-espn-ink-programming-deal.php

 

[blackgold]

Most illogical, as Spock would say. Especially since 1050 will become ESPN Deportes Radio. Hey, ESPN speaks Spanish on cable, right?
No, no, no, no, no, no, no!

 

[davideduardo]

In other words, radios in retail and office locations aren't often tuned to urban formatted stations, so the crucial "not voluntarily listening" audience that PPM seems designed to measure is lacking? Tell me again why it suddenly doesn't matter to advertisers whether their sales pitches reach an audience that is engaged by the programming of the station it's listening to?

At work listening has historically been about 1/3 of all listening, with at home and in-car each being a third. In NYC, only a quarter of listening is in car, so we have to adjust the others up a bit.

Most at-work listening is not in offices, since most workplaces are not offices. The locations are loading docks, delivery trucks, repair shops, stockrooms, etc. and as often as not any kind of station can be listened to. Do you think the guys at an auto parts store in Brooklyn are listening to Lite FM?

Advertisers want exposure, and that is one of the reasons they pushed for stations to step up and spend the extra money to give them the PPM.

Two years ago, Arbitron had a workgroup of major agencies and buyers, reps and station group researchers to determine the need, form and feasibility of an engagement metric. It was determined that the time buyers wanted simplicity, not an additional metric and radio stations would not immediately benefit from such a metric. The answer to your question is that no, advertisers who use ratings don't want that measurement.

 

[htowler]

Last Book 98.7 kiss 3.8 WBLS 3.1 Way under Lite 7.5 3.1+3.8 = 6.9 Will be interesting next book. The combined station has the potential of moving right into 2nd Place just under Lite. I know the number probably would not work like that but the potential is there.

 

[TheBigA]

I know the number probably would not work like that but the potential is there.

The first thing you look at is the amount of sharing that currently takes place between the two stations.

The next thing you factor is the difficulty Kiss listeners who didn't have BLS on their pre-set have in finding the new station.

Then you get the loyalty factor. The folks who will refuse to go to 107 because they've lost their station, or those BLS listeners who will stop listening to 107 because it's changed.

I estimate that WBLS will increase to a 4.3 as a result of the change.

 

[JimH]

The next thing you factor is the difficulty Kiss listeners who didn't have BLS on their pre-set have in finding the new station.

Can't see all that much difficulty in finding the new station at 107.5, since there is a current simulcast, and I imagine there will be a lot of publicity/billboards/TV ads/etc about the change, plus some dialing around once the WRKS listener finds 98.7 running sports.

 

[TheBigA]

Can't see all that much difficulty in finding the new station at 107.5, since there is a current simulcast, and I imagine there will be a lot of publicity/billboards/TV ads/etc about the change, plus some dialing around once the WRKS listener finds 98.7 running sports.

You'd be surprised. How long has there been news on 101.9? I bet if you did a poll, more than 50% of people in NY would say there's still jazz at that frequency. People are slow to adapt to change.

 

[davideduardo]

The first thing you look at is the amount of sharing that currently takes place between the two stations.

It was between 45% and 50%. So about half the WRKS audience already used WBLS / 107.5.

The next thing you factor is the difficulty Kiss listeners who didn't have BLS on their pre-set have in finding the new station.

Presets are nowhere near as important in NYC as so much less listening in that market is in-car. Within the targets of both stations, more cume is concentrated in the areas where public transit is used, so it's rather certain that presets are barely a factor.

This is mostly an awareness issue and then one of "Passing the trial" for non-cumers who come over.

There is also the question of whether Hot or Power might fine tune to capture some of the in-play listeners. Both of those shared nearly as much with Kiss as 'BLS did.

 

[Radio-X]

I'm on my smartphone right now and am partially too lazy to check the FCC FM query, but has anybody seen the actual LMA agreement? If its not up there I'd imagine it will be very soon. This may answer our questions as to why 98.7 isn't getting sold outright to ESPN/The Mouse.

My guess is that Emmis isn't wanting to sell the station in today's highly depressed market, and There is probably a clause that ESPN can buy it out after 2-3 years.

I also would love to see how much it costs to lease a big stick in the Big Apple.

Radio-X

 

[badjef]

I'm on my smartphone right now and am partially too lazy to check the FCC FM query, but has anybody seen the actual LMA agreement? If its not up there I'd imagine it will be very soon. This may answer our questions as to why 98.7 isn't getting sold outright to ESPN/The Mouse.

My guess is that Emmis isn't wanting to sell the station in today's highly depressed market, and There is probably a clause that ESPN can buy it out after 2-3 years.

I also would love to see how much it costs to lease a big stick in the Big Apple.

Radio-X

My guess is that this is a trend that will continue. Unless the royalty fees put Pandora, etc. out of the game, the migration of music away from the FM dial and the owners of the sticks to lease out the frequency by way of the LMA, or similar, may very well be the future of radio.

No doubt that the spoken word will continue to pop up on an FM. Whether in a simulcast with the sister AM or a complete migration will be an individual decision based on the signal coverages of both.

The "dolla a holla" we have seen, will doubtless continue to, at least, help pay the electric bill and upkeep during certain day parts.

The WRKS situation with Emmis, I do not think is isolated. I believe it is, in fact, a revelation of things to come.

This will be a bumpy ride. Radio, as we've known it, is changing.

Jeff in Sa-ra-so-ta!

 

[reelyreal]

I'm on my smartphone right now and am partially too lazy to check the FCC FM query, but has anybody seen the actual LMA agreement? If its not up there I'd imagine it will be very soon. This may answer our questions as to why 98.7 isn't getting sold outright to ESPN/The Mouse.

My guess is that Emmis isn't wanting to sell the station in today's highly depressed market, and There is probably a clause that ESPN can buy it out after 2-3 years.

I also would love to see how much it costs to lease a big stick in the Big Apple.

Radio-X

Tom Taylor had the details in his newsletter this morning. ESPN/Disney has made it clear they're not interested in being a station owner, they prefer to be a content generator with guaranteed outlets for said content.

Disney is guaranteeing a 12 year LMA, with a first-year payment of $8,435,000.00, increasing 3.5% each year thereafter. With the deal running through 2024, Tom Taylor says it's about $75 million in net proceeds from that note.

Emmis also gets $10 million for the intellectual property of 98.7 Kiss from YMF (107.5 WBLS). Emmis also gets quarterly earnouts of 15% of billing over current levels at WBLS, but I don't know for how long.

Billing for the past 3 fiscal years at WRKS:

Fiscal year ending February 2010: $16,621,000.00
Fiscal year ending February 2011: $14,500,000.00
Fiscal year ending February 2012: $11,276,000.00

The LMA appears to be a good way to stop the bleeding where it is.

 

[michael hagerty]

From the Radio-info.com story:
Emmis CEO Jeff Smulyan says "recent changes in the way radio ratings are measured"—meaning the Arbitron PPM—"made it very difficult for us to find success with Kiss FM."

Tell me again why it suddenly doesn't matter to advertisers whether their sales pitches reach an audience that is engaged by the programming of the station it's listening to?

Because advertising isn't effective on a single listen. It's cumulative. By the time you reach the tipping point and decide to try McDonald's Daily Double, you'll have heard the spot a dozen or more times. It won't matter if you liked, hated or were oblivious to some of the stations on which you heard the ad. It'll almost certainly be a mix of all of the above. All that matters to the advertiser is that you receive X number of impressions.

 

[htowler]

There is also the question of whether Hot or Power might fine tune to capture some of the in-play listeners. Both of those shared nearly as much with Kiss as 'BLS did.

You Read My Mind. Hot97 is running a few new Sweepers "Hot97 FOR Hip hop and R&B" Slight pause and a Slight Stress on R&B when it's said. That definatley was not there before the change was announced. Power already Played more R&B than Hot. Lets see what happens. I know someone said Power might flip Urban AC I DOUBT that, remember they flipped FROM Urban AC.

 

[jvn]

Here's another article on the ESPN deal from a Radio Management publication.

http://www.radioink.com/Article.asp?id=2443913&spid=24698

 

[badjef]

I'm on my smartphone right now and am partially too lazy to check the FCC FM query, but has anybody seen the actual LMA agreement? If its not up there I'd imagine it will be very soon. This may answer our questions as to why 98.7 isn't getting sold outright to ESPN/The Mouse.

My guess is that Emmis isn't wanting to sell the station in today's highly depressed market, and There is probably a clause that ESPN can buy it out after 2-3 years.

I also would love to see how much it costs to lease a big stick in the Big Apple.

Radio-X

Tom Taylor had the details in his newsletter this morning. ESPN/Disney has made it clear they're not interested in being a station owner, they prefer to be a content generator with guaranteed outlets for said content.

Disney is guaranteeing a 12 year LMA, with a first-year payment of $8,435,000.00, increasing 3.5% each year thereafter. With the deal running through 2024, Tom Taylor says it's about $75 million in net proceeds from that note.

Emmis also gets $10 million for the intellectual property of 98.7 Kiss from YMF (107.5 WBLS). Emmis also gets quarterly earnouts of 15% of billing over current levels at WBLS, but I don't know for how long.

Billing for the past 3 fiscal years at WRKS:

Fiscal year ending February 2010: $16,621,000.00
Fiscal year ending February 2011: $14,500,000.00
Fiscal year ending February 2012: $11,276,000.00

The LMA appears to be a good way to stop the bleeding where it is.

If true, then, this was a no-brainer for Jeff Semulyan & Co.

They are effectively getting the sales price of the station and still retain the property.

What is their annual expense on the legal and technical aspects of the station? 1 Million, maybe?

And you know that Disney is not going out of business any time soon. Without knowing the details, it sounds as though it will be similar to the 1560 deal before Disney purchased the 1560 freq from NYT.

Jeff in Sa-ra-so-ta!

 

[TheBigA]

Without knowing the details, it sounds as though it will be similar to the 1560 deal before Disney purchased the 1560 freq from NYT.

Lots of similarities. People often ask why do they keep running Radio Disney when it gets no ratings and makes very little money? The answer is because it furthers the brand. They aren't playing radio like the rest of us. They're playing a very different game. That's why owning towers and transmitters don't matter.

I really see this as the future of radio. There are those who feel that companies like Clear Channel overpaid for their stations, and can never pay back the billions they owe their lenders. That's if they run the company the traditional way. But if they instead lease out their frequencies to content creators, to brand managers, to companies that will use the radio stations as a marketing tool for other products, they can make enough money to pay back the investors without the cost of running the station. Seems like a brilliant idea, but it's exactly what RCA did with NBC. They created a market for radios by creating a radio network. What is ESPN doing? It is building a monolythical empire around sports without owning a sports team. It thrives off the energy those teams create, and it feeds the energy at the same time. AND (amazingly enough) it has NO COMPETITION!!!! How did this happen? OK, finally we see CBS and NBC starting their own branded cable sports channels. But who really cares? All people know is ESPN, the worldwide leader in sports.

Are there other companies that might benefit from this kind of brand extention? You betcha. Is it cheaper to LMA a radio station than buy advertising on other stations and media? You do the math. It's all marketing for the mother ship. So even if the radio station doesn't make money, it serves the ultimate goal, just like Radio Disney.

 

[badjef]

Without knowing the details, it sounds as though it will be similar to the 1560 deal before Disney purchased the 1560 freq from NYT.

Lots of similarities. People often ask why do they keep running Radio Disney when it gets no ratings and makes very little money? The answer is because it furthers the brand. They aren't playing radio like the rest of us. They're playing a very different game. That's why owning towers and transmitters don't matter.

I really see this as the future of radio. There are those who feel that companies like Clear Channel overpaid for their stations, and can never pay back the billions they owe their lenders. That's if they run the company the traditional way. But if they instead lease out their frequencies to content creators, to brand managers, to companies that will use the radio stations as a marketing tool for other products, they can make enough money to pay back the investors without the cost of running the station. Seems like a brilliant idea, but it's exactly what RCA did with NBC. They created a market for radios by creating a radio network. What is ESPN doing? It is building a monolythical empire around sports without owning a sports team. It thrives off the energy those teams create, and it feeds the energy at the same time. AND (amazingly enough) it has NO COMPETITION!!!! How did this happen? OK, finally we see CBS and NBC starting their own branded cable sports channels. But who really cares? All people know is ESPN, the worldwide leader in sports.

Are there other companies that might benefit from this kind of brand extention? You betcha. Is it cheaper to LMA a radio station than buy advertising on other stations and media? You do the math. It's all marketing for the mother ship. So even if the radio station doesn't make money, it serves the ultimate goal, just like Radio Disney.

I would direct you to my Post#91, above.

Jacor and then Clear Channel, both, wayyy overpaid for their stations. We have seen it, here, it the Tampa Market. Heritage stations were gutted in favor of syndicated shows in order to help pay down the debt.

Gee, where is the government bailout of Clear Channel? Couldn't you say there was "predator lending" there?

People who talk badly about Clear Channel have not been paying attention to the whole situation since the deregulation rules of 1996.

Sorry, guys, you can't have both way.

Jeff in Sa-ra-so-ta!

 

[TheBigA]

People who talk badly about Clear Channel have not been paying attention to the whole situation since the deregulation rules of 1996.

Emmis isn't Clear Channel. It bought WRKS in 1994 before deregulation. Emmis paid a lot for its stations, but it was pre-deregulation money. If you look at Tom Taylor's numbers, what has hurt Emmis and WRKS isn't the debt, but declining revenues. That's actually what's hurting most radio companies. The debt was factored in when these companies bought their stations. What wasn't factored in was declining revenues. Like declining home values.

The theory that drove companies after deregulation was that revenues would always increase, and you could run radio-only companies in major markets, rather than as divisions of other more diversified companies. What we've learned in the last five years is that revenues don't always increase, and that diversification is important. The diversified media companies are surviving, and the single-focus radio-only companies are struggling. Emmis is a radio-only company that is now becoming a landlord. That's a different business. That may be the way for debt-strapped companies to survive in an era of delining revenues.

 

[badjef]

People who talk badly about Clear Channel have not been paying attention to the whole situation since the deregulation rules of 1996.

Emmis isn't Clear Channel. It bought WRKS in 1994 before deregulation. Emmis paid a lot for its stations, but it was pre-deregulation money. If you look at Tom Taylor's numbers, what has hurt Emmis and WRKS isn't the debt, but declining revenues. That's actually what's hurting most radio companies. The debt was factored in when these companies bought their stations. What wasn't factored in was declining revenues. Like declining home values.

The theory that drove companies after deregulation was that revenues would always increase, and you could run radio-only companies in major markets, rather than as divisions of other more diversified companies. What we've learned in the last five years is that revenues don't always increase, and that diversification is important. The diversified media companies are surviving, and the single-focus radio-only companies are struggling. Emmis is a radio-only company that is now becoming a landlord. That's a different business. That may be the way for debt-strapped companies to survive in an era of declining revenues.

Deregulation was long in coming and was not a secret when implemented.
We went from 7-7-7 to 12-12-12 to "unlimited".

Although 98.7 was purchased before the '96 law, there were plans in place and adjustments were made in advance to the inevitable. It is how so many purchases took place at the same time. Most of the leg work was done by then.

Jeff in Sa-ra-so-ta!